In a report published Wednesday, Goldman Sachs Group reiterated its Buy rating on Facebook (NASDAQ: FB), and raised its price target from $35.00 to $38.00.

Goldman Sachs noted, “Overall we see upside to the quarter on the continued strong ramp in News Feed ads along with the new Gifts services which launched in late September. We believe our estimate of $404mn in revenue from in New Feed ads may prove too conservative. For example, our forecast implies $4.4mn in average daily revenue (consensus $5.0mn) from in stream ads when the company commented that it exited the September quarter with roughly $4.0mn in daily Sponsored Story revenue. Additionally, as we highlight in our sensitivity analysis, small increases in ad frequency can generate significant incremental in News Feed revenue given the size of the user base. For example, if Facebook showed the average user one additional ad every other day for the whole quarter, this would produce roughly $100mn in incremental revenue. Further, Gifts could represent $20-45mn in Payments revenue not included in our current 4Q12 payments estimates.”